A person finds an error when reviewing her credit report. What can she do?

Contact the credit reporting agency immediately about the error

Bankruptcy allows a person to erase all of the following debts EXCEPT for: credit card charges and installment loans, doctors' fees and hospital charges, past due rent and car loans, income taxes and child support payments.

income taxes and child support payments

The line of credit on a person's credit card has been increased from $5,000 to $7,500. What does the increase mean?

The credit card owner can charge purchases up to $7,500

A benefit of using a debit card is that it provides a way to

limit the amount of cash a person needs to carry

The US government uses a progressive/graduated income tax method. This means that the income tax a person has to pay is based on the idea that the

more the person earns, the more the person pays

A person should consider paying her monthly bills automatically from her checking account because it

makes it easier to pay the bills on time each month

To become a Certified Financial Planner, the person must have: a law degree, been a stockbroker, an investment portfolio worth more than $50,000, or passed specific examinations to qualify for the license.

passed specific examinations to qualify for the license

Which is the most important question to ask when comparing credit card offers?

What is the annual percentage rate (APR) on the credit card

A person who pays the minimum balance due on a credit card bill will

be charged interest on the unpaid balance

A tenant's 2-year lease expired and the tenant plans to move. His security deposit, being held by his landlord will be

returned plus interest, if legally required, minus the cost of repairing damages

Bank A offers 3% interest compounded monthly on savings accounts, while Bank B offers 3% interest compounded quarterly on its savings accounts. Which bank offers the best deal?

Bank A, because the more frequently the balance is compounded the better the return on the money

Which action is considered an unauthorized use of an individual's credit card? Options: Signing the back of the credit card, Making purchases with a credit card found in the street, Destroying credit card receipts before the items are billed, Purchasing items on the internet using the credit card

Making purchases with a credit card found in the street

One DISADVANTAGE of using a non-bank ATM in a store is that person

may be charged an ATM fee for the withdrawl

Bank customers can use an ATM to

transfer money between checking and savings accounts

A college student has a joint credit card with her mother. During the first semester, the student charges $1,500 for gas, food, and books. The credit card bill for $1,500 will have to be paid by:

mother and/or the student since both individuals are responsible for repaying any debt

A financially literate person invests and makes donations by using money that is

left after paying his budgeted monthly expenses

A person with a job just has a baby. She is able to increase her paycheck by

adding the baby to her payroll exemptions (allowance)

Which financial adviser is recommending a long-term investment that lowers investment risk? Options: Advisor A "Purchase a used car." Advisor B: "Purchase a computer." Advisor C: "Invest in mutual funds." Advisor D: "Invest in speculative stock."

Advisor C: "Invest in mutual funds."

Who will have to pay the remaining $2,000 of Dana's personal loan after she paid $8,000 and refused to pay the rest?

Susan, since she co-signed for the loan.

What activity can help a person increase her wealth? Options: Buying a two-family house and selling it at a profit, Renting an expensive apartment and living in it, Buying term life insurance, Renting a safe deposit box in a bank

Renting a safe deposit box in a bank

A person generally spends $100 a month on groceries. If this year's inflation rate is 5%, the person can expect to

spend more for the same amount of groceries

When a financial advisor says that everyone should follow the principle of "Pay yourself first", the advisor means that a person should

put aside money for saving and investing from each paycheck before spending

Why is it important to have health insurance?

To help pay for high medical expenses

A person investing 3% of a $31,000 salary each year in a 401(k) starting at age 25 will have much more money at age 70 than someone who waited until age 50 to invest 3% each year of a $55,000 salary. Why is this true?

The invested money has had a longer period of time to benefit from compounding and investment gains.

A person refuses to open a savings account because he worries that the bank will fail and he will lose all of his money. What does this person need to know?

Accounts at Federal Deposit Insurance Corporation (FDIC) member banks are insured up to $250,000.

When thinking about taking a loan from a non-bank consumer finance company, a person needs to know that he needs to have a diversified investment portfolio.

needs to have a diversified investment portfolio

When purchasing stock, a person should be aware that there is no guarentee that the price of the stock will go up

there is no guarentee that the price of the stock will go up

A person received an email from his bank requesting his Social Security number. The first action the person should take is to

check with his bank by calling the phone number on his bank statement.

A stock is characterized as a "growth" stock because the expectation is for the corporation to

have signifcant increase in sales and earnings

The rule of 72 is an easy way to determine how long it will take for savings to double at a specific rate of interest.

long it will take for savings to double at a specific rate of interest

A person receives health insurance as an employment benefit. The insurance has a $15 co-payment. This means that at each visit to a participating doctor the

person will be responsible for paying $15 regardless of the cost of the visit.

The bank foreclosed on a person's home which means that the homeowner

failed to make mortgage loan payments and the bank took possession of the home

Ultimate Wise Review :) Flashcards

Student preview

50 questions

Show all answers

1.

FLASHCARD QUESTION

Front

The value of buying insurance for a cell phone is to

Back

be able to replace the cell phone if it is lost or stolen

2.

FLASHCARD QUESTION

Front

If a person has to pay $35 a year on each $100 borrowed, the cost in interest is?

Back

high

3.

FLASHCARD QUESTION

Front

When a person wins $5,000 in the lottery, the person will

Back

have to report the $5,000 to the Internal Revenue Service (IRS) as income for that year.

4.

FLASHCARD QUESTION

Front

Which budget category is correctly matched with its explanation? Fixed expense: $50 pair of shoes to go with a new outfit, Variable expense: $60 automatically deposited monthly into a savings account, Fixed expense: $120 monthly car insurance bill, Variable expense: $450 monthly rent payment

Back

Fixed expense: $120 monthly car insurance bill

5.

FLASHCARD QUESTION

Front

The cost of car insurance is affected by the: kind of car owned, expertise of the car salesperson, type of gas the car requires, number of times the car has been serviced.

Back

kind of car owned

6.

FLASHCARD QUESTION

Front

Why would a person put a stop payment on a check? Options: The payee does not have a checking account, To prevent anyone from cashing a check that was lost or stolen, To avoid paying a fee for a lost check, To close the checking account

Back

To prevent anyone from cashing a check that was lost or stolen

7.

FLASHCARD QUESTION

Front

A person has a car loan with a 10% interest rate. The loan would cost the least amount of money if it is paid back in

Back

3 years

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